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Alliance Resources, Their Full Ownership Provides Advancement Incentive

Wally Graham - the Resources Roadhouse - 20-Jun-2019

Alliance Resources (ASX: AGS) recently moved to 100 per cent-ownership of the company’s Wilcherry project in South Australia and has signalled it intends shifting up a gear in advancing the Weednanna gold deposit.

The company recently moved to 100 per cent-ownership of the Wilcherry project, acquiring the final percentage of the project from Tyranna Resources, greatly improving its ability to advance Weednanna on its own terms.

The deal eliminates the administrative burden and costs associated with operating a joint venture and will streamline the future statutory approvals required at the time Alliance submits a Mining Lease Proposal in respect of the Weednanna gold deposit.

Alliance is the latest in a line of suitors, dating back to the 1970s, eager to explore the project, located within the Gawler Craton, northern Eyre Peninsula, 40 kilometres north of Kimba in SA.

The project’s previous owner was Trafford Resources, which had acquired the project in 2006 from Aquila Resources, which had earlier acquired the project tenements to explore for IOCG deposits like Olympic Dam.

Trafford, along with IronClad Mining Limited, made a substantial investment on the project, however their efforts were mostly aimed at defining iron ore, Direct Shipping Ore (DSO) to be precise, in magnetite skarns, banded iron formations and near surface iron oxide deposits.

Trafford made inroads, establishing Mineral Resources totalling 224 million tonnes at 28.8 per cent iron in seven deposits, with 2.9 million tonnes at 55.5 per cent iron being either DSO or Dry Magnetic Separation product.

With the iron ore price enjoying some time in the limelight at present, it is well worth noting these Resources.

Likewise, the 2012-13, drilling programs carried out by IronClad to test an outcrop of high-grade hematite at the Zealous prospect, 13 kilometres northeast of Wilcherry Hill.

This drilling intersected high-grade tin (cassiterite) – which followers of the current electric vehicle debate would know to be a critical element in the manufacture of lithium-ion batteries.

The best intercepts from these programs returned:

12ZLRC007
7 metres at 3.28 per cent tin from 52m; and

13ZLRC001
5m at 2.29 per cent tin from 128m in.

Alliance Resources has approached Wilcherry from another angle, concentrating on what the company considers to be its substantial gold potential, and to date the company has increased both the project’s known mineralisation and potential.

At the time of writing the company was close to completing a Scoping Study to assess the commercial viability of establishing a standalone mining and processing operation at Weednanna.

In September 2018, Alliance Resources announced a maiden Mineral Resource estimate for the Weednanna gold deposit, part of the Wilcherry project, of 1.097 million tonnes at 5.1 grams per tonne gold for 181,000 ounces.

Alliance has always been confident in there being potential to increase the size of this Mineral Resource with further drilling, given many of the gold shoots comprising this mineral resource are open in at least one direction.

Alliance completed a 23-hole round of reverse circulation (RC) drilling at the Weednanna gold deposit in February this year to test for extensions of gold mineralisation in the southern area of the deposit at Shoots 4, 5E, and 11.

The drilling stayed on script, with results from this drilling program continuing to grow the size of the Weednanna deposit outside of the Maiden Mineral Resource area.

High-grade gold was encountered near the southern end of Shoot 4, returning intersections of:

19WDRC017
2 metres at 46.8 grams per tonne gold from 101m; and

19WDRC020
3m at 9.7g/t gold.

The drilling also continued to provide greater clarity at shoot 5E, returning intersections of:

19WDRC004
3m at 6.9g/t gold from 106m;

19WDRC007
10m at 7.7g/t gold from 117m, including 7m at 10g/t gold from 118m; and

19WDRC010
2m at 19.9g/t gold from 77m.

The gold potential of Shoot 11 was clearly demonstrated by intersections of:

19WDRCC012
3m at 7.3g/t gold from 97m (hangingwall); and
12m at 2.5g/t gold from 108m, including 8m at 3g/t gold from 108m;

19WDRC013
16m at 3.7g/t gold from 134m, including 10m at 4.3g/t gold from 134m;

19WDRC022
1m at 19g/t gold from 77m (hangingwall); and
7m at 4.5g/t gold from 90m.

Alliance originally identified Shoot 11 in 2018 while carrying out 3D modelling of the geology of the Weednanna deposit.

This shoot is positioned near the footwall contact of the Paleo-Proterozoic calc-silicate and magnetite skarn and was initially defined on two 25-metre spaced cross-sections by assay results including:

97WDRC010B
4m at 3.6g/t gold from 102m; and

18WDRC016
9m at 2.3g/t gold from 163m.

During December 2018, Alliance completed the first targeted holes into this shoot that returned:

18WDRC064
11m at 1.3g/t gold from 97m;

18WDRC065
7m at 1.5g/t gold from 112m; and

18WDRC066
2m at 16.1g/t gold from 126m.

The recent drilling program has followed suit by hitting further major gold intersection that not only extended Shoot 11, but identified connection to Shoot 9, which is in the same geological position.

Shoot 9 had also previously come to the company’s attention when it reviewed historic drill intersections that showed results from Shoot 9, included:

98WDDH004
7m at 1.5g/t gold from 163m;

98WDRC022
3m at 1.5g/t gold from 58m; and

98WDRC030
3m at 3.2g/t gold from 188m.

The upshot from the latest drilling results Alliance has received from Weednanna is that they have confirmed that, as evidenced at Shoot 4, substantial gold mineralisation can occur near the footwall contact of the Paleo-Proterozoic calc-silicate and magnetite skarn, and that lower grade gold zones can act as a vector towards higher-grade gold mineralisation.

Historically there has been a limited amount of drilling carried out at the footwall contact of the skarn, meaning it remains poorly tested.

Alliance is of the opinion that there is plenty of potential there to discover further gold in this geological position.

The company has plans to keep the drillbit spinning at Weednanna with ongoing RC drilling programs planned to continue to grow the size of the deposit, kicking off with the next phase of drilling expected to commence during April.

Alliance had prior carried out a Three Dimensional Induced Polarisation (3DIP) survey at the Weednanna gold deposit, to help target further areas of mineralisation.

Results from the 3DIP survey observed gold mineralisation is closely associated with chargeability bodies that exhibit moderate to high chargeability and that these chargeable bodies extend deeper than 200m below the surface.

It also demonstrated there to be a strong correlation between high density, high chargeability and high gold concentrations at Weednanna.

The 3DIP survey defined nine target zones based on where the high chargeability zones correlate with high density zones and are near, or along strike from, known high-grade gold shoots Alliance had delineated through its numerous drilling programs.

Five out of the nine targets are shallow, which the company believes highlights the remaining near-surface potential to substantially grow the mineral resource.

So, what the 3DIP survey produced was a chargeability model that closely correlates with underlying geological detail/mapping and known gold mineralisation at Weednanna.

It deemed that many of the targets appear to correlate with the margins of the known gold shoots and some have clear structural control observed in aeromagnetic and gravity datasets.

The highly chargeable zones from the 3DIP surveys also correlate well with high density zones identified by a detailed 3D gravity inversion model the company had generated in 2018 that suggested, like the recent drilling, there is clear potential for further discoveries at deeper levels than have been currently tested.

 

Alliance Resources Limited

ACN 063 293 336

Head Office

Suite 3, 51-55 City Road

Southbank VIC, 3006

Tel: +61 3 9697 9090

Fax: +61 3 9697 9091

Email: info@allianceresources.com.au
Web:
www.allianceresources.com.au

Directors: Ian Gandel, Tony Lethlean, Steve Johnston